China threatens to use rare earths as a trade war weapon
China is reportedly mulling to leverage its control of rare earths as a weapon in its intensifying trade spat with the U.S. The National Development and Reform Commission (China’s powerful planning body) on Tuesday floated the idea of cutting off rare earth metals to the U.S.
“Will rare earths become China’s counter-weapon against the US’s unwarranted suppression? What I can tell you is that if anyone wants to use products made from rare earth to curb the development of China, then …Chinese people will not be happy,” read a notice from the agency.
Rare earths are a group of 17 chemical elements that are vital to many modern technologies such as computers and networks, communications, consumer electronics, and clean energy. China controls 95% of the world’s production of rare earth metals.
According to the U.S. Geological Survey, American companies import 80% of the rare earth metals they need from China.
As of 6:45 a.m. ET Wednesday, futures on the blue-chip Dow dropped 153 points or 0.6%. Futures on the broader S&P 500 declined 16 points or 0.6%, while those on the tech-heavy Nasdaq 100 were seen losing 59 points or 0.8%.
Huawei files motion to overturn U.S. federal ban
Chinese tech behemoth Huawei Technologies is challenging the legality of a recent U.S. defense bill that prohibits federal agencies from buying its telecom equipment.
The company said on Wednesday it has asked a U.S. court to rule on whether it is constitutional for the Trump administration to implement a military spending bill that bans government agencies from using Huawei products.
“The US government has provided no evidence to show that Huawei is a security threat,” said Huawei chief legal officer Song Liuping in a statement. “There is no gun, no smoke. Only speculation.”
The White House has accused the telecommunications giant of developing technology that could be used to spy on the U.S. and its allies by China’s ruling Communist Party. President Trump is actively leading a public campaign to persuade U.S. allies not to allow the company to launch 5G networks within their borders.
Retail earnings in focus on Wall Street
PHV Corp (NYSE: PVH) is expected to announce its earnings results after market close.